Malawi's third EITI Report covers oil, gas and mining sectors as well as the forestry sector for the period from 1 July 2016 and 30 June 2017. It was published in November 2019.
The country is a small producer of uranium, gemstones, coal and construction materials, although the government is promoting investment in petroleum and in minerals such as graphite. Some have expressed concerns about the sector’s environmental impact, distribution of benefits and license awards, particularly related to the oil exploration around Lake Malawi. Malawi is implementing the EITI to build trust amongst stakeholders in the mining, oil and gas sectors.
Malawi's third EITI was published in 2019, covering the oil, gas, mining and forestry sectors.
The Ministry of Natural Resources, Energy and Mining (MNREM) is the Government Entity responsible for the administration of the minerals sector, including granting mining licences. It has statutory oversight of the energy, minerals, and forestry sectors. The minerals sector is regulated by the Mines and Minerals Act (1981) whiles the upstream oil and gas sector is regulated by the Petroleum Exploration and Production Act (1983) (PEPA). Plans are underway to review the legal instruments governing the extractive sector. Due to the importance of artisanal and small-scale mining, MNREM has drafted an Artisanal and Small Scale Mining Policy in an effort to stimulate and guide ASM operations by administering, regulating and facilitating the growth of the sub-sector through a well-organised and efficient institutional framework.
The main taxes and fees imposed on companies operating in the mining sector include Corporate tax, Dividends Tax, Royalties and Fees. The Malawi Revenue Authority (MRA) is the main body responsible for collecting and managing taxes paid to the central government.
Oil and mining contracts are public and are available online.
Mining licenses are awarded on a ‘first come first served’ basis, while oil and gas licenses have been awarded through restricted competitive tenders. Malawi has a public mining cadastre available online.
Objectives of beneficial ownership transparency in Malawi
- Increasing the contribution of the mining sector to Gross Domestic Product (GDP) from less than 1% to 20% by 2025;
- Promoting good governance and accountability in the extractive sector;
- Deterring corruption in the allocation of extractive rights;
- Preventing abuse of Malawi’s taxation system;
- Support of efforts to address money laundering and other financial crimes in the economy;
- Promoting Malawian citizens’ participation in the monitoring of extractive activities, including local content provisions and;
- Promoting citizens getting the full economic benefit of the nation’s natural resources, especially in communities where extraction is taking place.
Progress on implementing beneficial ownership disclosure
According to Malawi’s latest EITI report, the Companies Act (1984) is set to be reformed to provide for beneficial ownership disclsoure. The report provides some disclosure of legal and beneficial ownership for companies although this does not cover all extractive companies.
Malawi EITI plans to fully implement its beneficial ownership roadmap through organising meetings with key stakeholders to drive for legislation on beneicial ownership disclosure and building the capacities of relevant institutions to champion and facilitate implementation of beneficial ownership disclosure. Read Malawi's beneficial ownership roadmap below for more information.
Government will ensure that in the future, mining contracts are properly negotiated to maximise benefits for the country. In this regard, Government will establish an independent contract negotiating unit in extractive resources.
Malawi is a small producer of uranium, rock aggregate, bituminous coal, gemstones, limestone and a range of construction materials. The country is also promoting oil and gas exploration, particularly around the Lake Malawi region. In the latest 2016/17 Malawi-EITI Report, rock aggregates accounted for more than half (56%) of extractive sector revenue, followed by coal (19%).
Malawi has deposits of uranium, coal, limestone, bauxite and rare earths.
|Uranium||11,337||metric tons||U3O8 content, from total reserves of 10.46 million tons of ore.|
|Coal, bituminious||21.4||million metric tons|
|Limestone||25||million metric tons|
|Bauxite||28.8||million metric tons||With average grade of 43.9% AL2O3|
|Beach dune sand||700||million metric tons||With an average grade of 5.6% total heavy mineral sands (ilmenite, zircon, rutile, monazite and garnet)|
|Rare earths||2.5||million metric tons||With 4.2% rare earths content and substantial inferred resources.|
According to the MEITI 2016/17 report, total revenue for the extractive sector was MWK 11,457 million (equivalent to USD 15.5 million) of which 47% came from forestry, and 28% from solid minerals, and 9% from oil and gas. These revenues were mainly collected through royalty tax, resource rent tax and corporate income tax and log sales.
The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.
- Malawi's latest EITI Report provides information about the legal/fiscal framework, revenues and contribution of the forestry sector to the economy.
- EITI Malawi also covers transport revenue disclosures for the extractive sector.
The EITI Board suspended Malawi on 16 October 2019 for failing to publish its 2016/17 EITI Report by 30 June 2019 (Decision 2019-60/BC-279). The suspension was lifted after Malawi published its report in November 2019 (Decision 2019-72/BC-282)
Malawi EITI aims to be a key part of Malawi’s reforms to increase transparency and accountability in the natural resource sector. The 2020 work plan includes strategic goals like building trust between stakeholders and strengthening partnerships.
The government announced its intention to implement the EITI in a Presidential address to the 45th session of Parliament on 17 June 2014, although this commitment was already included in the government’s March 2013 Mines and Minerals Policy. Malawi had undertaken previous preparatory work, as outlined in the (then) Ministry of Finance and Development Cooperation’s October 2011 overview of work done in Malawi’s EITI debate. The ToR of the multi-stakeholder group gives four seats each to the three stakeholder groups (with alternates). Members are appointed for three years renewable.
Malawi's first EITI Report covers oil, gas and mining sectors as well as the forestry sector for the period from 1 July 2014 and 30 June 2015 (2014/15 FY). It was published in April 2017.